Phil - I'm with you just little bit longer than a month and you can not imagine how happy I am now, and not just because my P/L improved ( and I'm sure that it will be even better), but I found that the worst thing in trader's carrier is a LONELINESS. Here I found so many bright good guys, I looked for this service for years.
THANK YOU AND TAKE GOOD CARE OF YOURSELF BECAUSE I PLAN TO STAY HERE AND RIDE THIS CREASY MARKET WITH YOU FOR ANOTHER 20-30 YEARS
Tchayipov
Phil I must say that it was really nice to have a portfolio that was looking very stable in the face of a rough day for the markets. I ended the day up 0.3% which includes another successful day of futures trading. So with a portfolio of mostly cash, a few of our faves like Apple and LL, JO, TOL, DIS, etc., along with a couple of hedges that paid off nicely today, and my futures trades, I never had to break a sweat during that madhouse today. Yes, by George (or Phil), I may be learning this system!
Craig
I would like to thank Phil and PSW crew for the insight and assistance (even the liberals).
In December I initiated long stock positions buying stock, writing calls and puts in AAPL, WFR and CHK (scaling in and out). Over the last week I have been trimming back my positions selling stock and taking out my callers and putters. I am now back to my initial 25% position that I started with in December. However this time, my cost basis on shares AAPL, WFR, and CHK is $0! With money to spare from those positions.
Texasmotion
I did the same thing via your logic (sold puts that is). I glanced one time and they were already up 15% which is considered a good return for an overnight hold in most circles. This is PSW though and to us it's just another day…
Kwan
Way back did 20 of your suggested short BP Jan 11 26 P @ 4.3 now .85 — sold half. this am —
paid for a years sub AGain!! thank you very much!
Ban2
Very nice in and out on those USO puts again, easy way to get the subscription covered in just a couple of hours.
Thanks again Phil and everyone here contributing to such intelligent and informative discussion! I have wasted countless hours reading "professional newsletters" and message board blather over the years. Have learned a great deal here in a very short time. I have sent out a number of invites to friends and family for stockworld!
Eyezz
Phil… My portfolio, in the past few months, has acheived a high degree of stabilization. I've noticed that on up days, down days, even days, it doesn't matter, my portfolio rarely varies more than 2%. And over the long haul it just slowly increases in value. I attribute this not to investment choices, but to style. Thanks to you and others on this site I'm paying close attention to position size, delta neutrality, downside protection, and concentrating on selling premium rather than buying it. I've developed increasing patience, not having to trade daily, or even weekly. I'm concentrating on the finer points of trading, letting the profits come to me, rather than the other way around. I appreciate the help everyone here has given in getting me focused on this principle. I'm pumped!…in a calm sort of way.
Iflantheman
Phil, i wanted to thank you again for helping me protect future stock allocations at work - finally, i feel like i am owning my own destiny with stocks vs. letting the market dictate what you get – thanks again.
Nramanuja
Phil – just wanted to say a sincere thank you for teaching me how to offset, hedge, roll, and not panic. My account is up 10% in the last two weeks, and far from panic, this is becoming great fun. Thanks again,
Deano
Phil/USO Adjustment~~ Thanks for showing us the make it even (maybe even profitable) tricks for 'fixing' a losing position. I would have never known the trick if you didn't explain it. The option adjustment techniques are very helpful. Trading stocks would probably never offer that kind of flexibilities! Thanks!
Investwizard
Market manipulation…. One of the things I've gained from this site is the concept of market manipulation. I never thought it was so prevalent, but now I know it is. I actually consider its effect when I make trades. Several days ago, when AAPL was moving toward 220 I sold 210 calls. My reasoning was that they will probably pin this month at 210. They came in big time as the stock moved ever closer to 210. I agree with Phil's comment that one of the things we need to do is find out what they are manipulating, and how, and hitch a ride. They are doing this with several equities. I've actually seen one article describing several equities that were being manipulated to pin at expiration each month, and describing how it was done, and of course Phil has described it well. In some ways it's easier to figure this out than it is a ‘normal' market behavior, and thus easier to make money in certain equities.
Iflantheman
Happy holidays to all members of PSW. Just completed my 6th year and still my favorite site to read. Thank you all for your contributions and support especially you, Phil!
DClark41
Phil: Closed out ZION with 49 % gain!
RMM
Hi Mr. Phill, I am a Venezuelan lady tormented by our politicall situation, who use to be an emerging market trader, and many other executive positins in the finance "arena" and now is trying to built a new concept and service for asset management for clients on my own, I am in the trial and learning process at the moment, I also invest for some friends and myself. I want to congratulate you , because reading you fill my days with a touch of irony (besides ,of course the spectacular market insight) that happens to give me energy, its a joy the remarks and comments even the pictures used, sometimes I just read it for the fun, I completily agree with your thouhts, though we belong to totally different cultures and enviorements and certanly realities Your readings is like a little hand helping me out to be in the market and fight for my devastated country where every single day we looe inches and yards of liberty. You shoul try to writte a book!
Mindeyes
You are doing a fantastic job. I think most of us our very well balanced and consequently have learned how to manage through these ever so short declines in the market without panic.
Dclark41
Phil-
I would like to echo the sentiments of dclark41. Joining this site was the best thing I have ever done to aid my growth as a trader/investor. There are so many smart and experienced people here sharing their ideas that regardless what your investing style is you will learn something daily. Thank you and all the regular contributors for your generosity.
Acd54
Thanks for all the work you put into this site. I have looked at a few other option advisory or "mentoring" services this year, but no one offers even a fraction of the content or the level of services you provide at PSW!
Jelutuck
Why were the analysts wrong?
If I were a Japanese investor who purchased US stocks prior to November at Y80 yen to the dollar, with the US market up an average of 15% or more and upon selling the asset I covert dollars to Yen, also realizing an additional 25% gain (one dollar now converts to 100+ Yen rather than the 80 I used at time of purchase), I think I would be unloading US assets also.
But analysts never do the math in their articles nor very rarely bring up or discuss the ramifications of currency fluctuations. I don't include Phil in this group as this is a valuable lesson I am learning from him.
Denlundy
Hey I just did a nice options trade on LL for $800 (50%) gain thanks to this site, so… not bad for my first day! An hour of reading you guys and I already paid for two months subscription! Thank you!
lchu
This site, for me, is where I have learned how to use options & futures. It is also where I get a constant flow of new ideas. In addition, it's great to know that I have many sources, mostly Phil, if I get lost in a trade. I have been here for 8 years, and am grateful to PHIL and fellow members. I manage about half a million, and although I may not always achieve what Phil does, I am not complaining. I have learned so much. Thank you Phil!
DClark41
Way to go Phil! Have I said how much I appreciate your site lately! Your ability to teach and your willingless to give others a forum to demonstrate their own skill sets makes your site remarkable. I got great help from you, jmm1951, and Iflantheman (special thanks!) today. Hell, if I have many more days like this I may even be able to sign up for a full year rather than doing it just quarterly. Tomorrow is another day but, fabulous job today!
dclark41
I like the retirement picks too. The futures trading is certainly more sexy, but the boring retirement picks are the ones that consistently make me money.
jjennings
Thanks Phil, your note at the close was responsible for making those silly GOOG sellers pay for my NYC sojourn, nice!!
zeroxzero
Boring trading – Phil/ Thanks to PSW, my yearly covered-writes are on pace for 15%. Add the long puts and well over 20%… and I look at it once a day and never lose sleep over it. Actually doing better than my trading account at this point (Thanks, summer 2013)
Anyway, the point is that anyone with enough money would be wise to do the 20% – 40% stuff and do trading as a hobby…
Arivera
I'm just starting my second year as a member, and I'd like to thank all of you for sharing your trading ideas and insight, and especially Phil of course for great all-around investing advice as well as trades! In addition to learning patience and profit-taking, I think one of the most important things I'm learning here is to stick to stocks and trades that suit my temperament. And wow, I had NO idea how hard it was to learn patience. I should say "practice" instead of "learn", because it seems to be a constant struggle. Phil, please keep reminding us how nice CASH is!
Jerseyside
WOW, glad I went bearish… Phil, thanks for the help on the QID calls yesterday, I turned it into a partial cover rolling down to the Feb 52s selling the 55s 1/2 covered. Sold 1/2 and now lowered my cost basis to $4.38 on the $52s (fully covered).
Texasmotion
Phil, I just wanted to say thanks for being there. The world needs more of you. Your site continues to positively change my life daily.
Chasw
Thank you Phil we appreciate all the work you put in to teach us valuable lessons about investing.
Pat Swap
I've been trading/investing since the early 80's (my dad started me out young). I've had seven figure accounts (in the past) and I've done lots of trading, so I can say that I'm a well seasoned investor. Phil is the real deal. His trades make sense and his strategy is sound. He sees things that others miss and he's one of the best at finding price anomalies. When he makes a mistake, he has an exit strategy already planned. He hedges very well and he has an instict which tells him to go to cash or to be all in.
Autolander
Praising PSW for enlightenment is a bit akin to praising the Pope for being holy. I've been reading PSW for about two months now and have learned more about investing technique and the world in general than I've learned from the books and seminars I've paid for. Thanks for the enlightenment, the education, the guidance and the truth, which is not a commodity these days, but a virtue in short supply.
We’ve been hearing about the prospect of lower future returns for U.S. based investors for years now*. The thesis behind this is fairly straightforward; high recent returns coupled with high valuations in the stock market, and low interest rates in the bond market is not conducive to further above average returns.
Consider the following:
A U.S. only 60/40 portfolio has compounded at 10.5% over the last 10 years.
The CAPE ratio is at 30.9
The ten-year treasury is currently yielding 1.8%
The more you pay for an asset relative to its underlying fundamentals, the less you should expect to receive going forward. You can see this relationship in the chart below, which plots the inverted CAPE ratio on the left-axis, and forward 10-year returns on the right-axis.
But valuations don’t matter over the short-term, sometimes matter over the medium-term, and usually matter over the long term. This is a long way of saying that valuations are a terrible timing tool, as we’ve learned over the last few years. We can see the relationship between higher valuations and lower returns in the chart below. Again, they matter, but no guarantees.
Future bond returns, unlike stocks, can be boiled down to a single variable, starting yield. The chart below shows the relationship between the starting yield of a ten-year bond and the future ten-year returns.
Below is a scatter plot that shows just how tight this relationship is. Starting yield tells you pretty much all you need to know about forward returns.
Okay, so we suspect that the above average returns we’ve been accustomed to won’t continue forever. The obvious question is, what do we do with this information?
Here are a few ideas (not investment advice)
Go beyond the S&P 500. Value stocks have done well, despite lagging by nearly 2% per year, foreign stocks, both developed and emerging, have done bubkis, while commodities have done downright awful.
If you’re worried about not just lower returns, but a potential market crash, realize that…
Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns..
Well not so secret now, the main point is you do not have to climb Mount Everest to be called a mountain climber, there are many other hills to climb to make your mark. Just like stocks.
You do not have to battle with the high frequency traders to win in the markets, there are long and slow methods to do just as well.
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Pattern 2
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The video shows off some stocks of future trades.
Changes in the world is the source of all market moves, to catch and ride the change we believe a combination
of Gann Angles, Cycles, Wyckoff and Ney logic
is the best way to ride the change, after all these methods have been used successfully for 70+ years.
This post is a delayed and small sample of what is avaliable to members. Sign up to enjoy the full service.
NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
Investing Quote…
..”Nothing new ever occurs in the business of speculating or investing in securities and commodities.”..
Jesse Livernore Trading Rule
..“Investing should be like watching paint dry or watching grass grow. If you want excitement…go to Las Vegas.”…
Paul Samuelson
..“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”..
It’s a good idea for investors to be aware of key indicators and inter-market relationships.
Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.
Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.
When crude oil tops or bottoms, it seems that the stock market follows along. And with Crude oil reversing lower last week, it’s probably a good idea that investors pay attention here.
Joe Friday Just The Facts Ma’am: The past two times Crude Oil has created a reversal pattern at the Fibonacci 61% retracement level, it fell at least 15% from the highs. Odds are strong that due to this pattern, Crude will experience a similar decline again.
Some price points lend themselves to potential turning points. Is the S&P at one of those price points? The inspector suggests it is!
This chart looks at the S&P 500 over the past couple of years. Fibonacci was applied to the 2018 highs and 2018 lows.
The rally off the December 2018 lows, has the S&P testing its 161% extension level at (1).
While at this extension level, momentum is the 2nd highest in the past 5-years.
The Fibonacci extension level becomes a price point where some stock market bulls need/want to see a breakout. If accomplished, it sends them a strong bullish message
Stock market bulls would receive a short-term concerning message should selling pressure or a reversal pattern take place, at this key Fibonacci extension level.
To become a member of Kimble Charting Solutions, click here.
Despite the fact that the bond market refuses to sell-off (as it should in a well-behaved market sending stocks to record-er and record-er highs each and every day), the levered long crowd has never been more "all-in" than they are right now.
While stocks are at record highs, bond yields are plumbing 2 month lows…
Source: Bloomberg
However, there are some notable anomalies in the VIX term structure that could become problematic in the next few days. As contracts expire, so the very steep term structure (fueling lots of short-vol-tilted carry trades) will flatten…
Source: Bloomberg
“This January VIX settlement is looking similar to January 2018 in that the new front month VIX spread between February and March is going to dramatically shrink the level of contango,” said Dave Roberts, independent trader of volatility and volatility products, using the trader term for an upward curve.
“Combining this mechanical condition with potential risk-off factors of Sanders winning Iowa and poor earnings reports from the tech heavyweights has the ability to turn a regular pullback in something more meaningful.”
And as Nomura's Charlie McElligott notes, in risk-asset bellwether US Equities, the current 96th %ile aggregate Dealer “Long $Gamma” position (~$31B between 3290 / 3300 / 3310 alone!) continues to act as a “gravitational force” for the S&P.
Source: Nomura
But, McElligott points out, there is a potential “UN-CLENCHING” in the SPX price-action IF (and that’s a BIG “if”) we don't see these options rolled up-and-out – because per our estimates, nearly 36% of the total $Gamma across strikes is set to drop-off following Friday’s expiry, which should then allow us greater freedom to move in either direction.
Source: Nomura
However, that hasn't stopped the momentum chasers adding more and more leverage.
Speculative excess has hit a fresh record among U.S. options traders – and that’s a negative for stocks over the medium term, according to Sundial Capital Research Inc.
Bloomberg reports that traders established fresh bullish positions
Confirming one part of this, overnight Goldman showed that equity net future positioning of hedge funds has hit an all time high, meaning there is little marginal space left for the smart money to buy.
Today, Nomura's two quants confirmed that when it comes to CTAs, they are indeed all in. As Nomura's Charlie McElligott writes, that "all major markets we track at + or – “100%” signals across the board which then allows for more leverage to be deployed into the positions / larger gross exposures":
At the same time, Nomura's other quant, Masanari Takada echoes this and writes "CTAs’ net long position in US equity futures has started to look excessive, and the momentum behind the buying seems to have fizzled out." According to the Nomura quant, this means that "Breezy bullishness looks like a bad idea at this point" and that "the situation looks primed for an overdone sell-off in response to even small fluctuations in the market."
What is the bigger picture? Here Takada preaches caution, noting that as a result of the Coronavirus concerns, "global equity markets have become jittery" and adds that "timing-wise… most hedge funds have swung to taking profits on their long positions in DM equities. It may be that these hedge funds have seized on the new coronavirus outbreak as a reason to take profits now."
Our estimates of major hedge funds’ exposure to DM equities (30-day beta) show that more hedge funds are exiting longs now than was the case at the end of December. Of course, long/short funds and other fundamentals-based, value-oriented investors following bottom-up strategies are feeling out dips to buy. Prior to this, however, global macro hedge funds, managed futures funds, and other such top-down investors
The big news this past week is that the S&P 500 got way out ahead of its 200-day moving average – more than 11% above, in fact.
Michael wrote about how shitty of a timing signal this measure is here, if you haven’t read it yet you CANNOT miss it.
In the meanwhile, Jon Krinsky notes that while we may be stretched based on recent history, in the 1990’s, the S&P was routinely more than 10% above the 200-day moving average, which led to consolidation periods followed by even higher new highs.
Here’s two charts from Jon:
It’s notable that this extreme breadth surge has happened with the SPX stretched vs. its 200 DMA. It is now at the widest spread (over 11%) since January 2018. Of course when momentum gets strong like it was two years ago, and it is now, there is no rule for how stretched things can become. It peaked at around 14% in Jan. ’18, and routinely was above 15% in the late 1990’s
By mid 1995, the SPX was 14% above its 200 DMA. You can see it routinely traded above that threshold over the last half of the decade, and while it did check back to its 200 DMA many times, there were other times where the market moved sideways or pushed even higher
Source:
What Happens When You Have a Breadth Surge and the SPX is Stretched?
Baycrest Partners – January 20th, 2020
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Date Found: Monday, 16 September 2019, 05:22:48 PM
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Comment:
This chart says SP500 should go back to 2016 levels (overshoot will occur of course)
Date Found: Tuesday, 17 September 2019, 01:53:30 AM
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Comment:
This would be HUGE…got gold!
Date Found: Wednesday, 18 September 2019, 01:40:53 AM
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Comment:
QE good for Gold (subject to US Govt 33000 naked short sale in 2013)
Date Found: Friday, 20 September 2019, 03:27:25 AM
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Comment:
Otavio (Tavi) Costa @TaviCosta8hThis is huge. 30-year yield vs. core CPI at its lowest level since 1980s! 10-year real yield? Same. Plunging as they did in mid
Date Found: Saturday, 21 September 2019, 02:54:49 AM
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Comment:
Inventories go up because (1) You cant sell the stuff, forecast demand incorrectly or (2) you are anticipating strong future demand, hence the build up: Most likely (1) in this case! Concur!
Date Found: Saturday, 21 September 2019, 11:37:06 PM
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Comment:
MOST IMPORTANT chart in the world, US is lagging interest rate cuts vs rest of world major central banks. Is the FED forcing a recession (anti TRUMP ??). FED must cut 50bps NOW to normalize.
Date Found: Tuesday, 24 September 2019, 07:00:06 AM
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Comment:
Wait what? You can bet on a NO DEAL BREXIT BMW wants to sell cars to UK. UK get ready to BOOM! Real buying power coming your way! Pound to get stronger!
Date Found: Wednesday, 25 September 2019, 02:31:12 AM
Click for popup. Clear your browser cache if image is not showing.…
The biggest known news date in the next 18 months is the US Election. The biggest unknown news date is when the US believes it is in a economic recession.
The Kitchin Cycle is still working.
We must conclude the major 900 period low is now in, and we are now in a up swing, which may top out ate 2020 or late 2021. Any future top out may only generate a 10% to 20% correction, of course this can be deemed very mild. This is expected, but the expected does always play out.
Rolling the dice to get '7' does not always work. Post US elections seasonal's aligned with a poor start of the decade seasonal trends, add on high global recession risk, add on a stock market slump tends to occur in the years ending 9,1,2,3,4 (like 1973, 1982, 1991, 2001, 2009 are all recession years), markets may get very interesting.
We will continue to watch the Kitchin cycle with interest.
The pullbacks in the SP500 have really tested below 20% over the 10+ year period. This very strange for such a long period of time, is it the algo's or the FED's trading team. Who knows! However the point is if price ever gets below 20% on a weekly close then you can bet the following sell off will be spectacular.
Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, Cycles, Wyckoff and Ney logic is the best way to ride the change, after all these methods have…
Increasing fears of coronavirus spreading across the U.S. have resulted in San Francisco Mayor London Breed to activate the city’s emergency operations center, reported the San Francisco Chronicle.
The World Health Organization’s decision to not declare the novel coronavirus outbreak in China a public health emergency of international concern, or PHEIC, will surprise many. The number of reported cases and deaths is doubling every co...
• SAExploration Holdings, Inc. (NASDAQ:SAEX) stock moved upwards by 6.3% to $2.77 during Monday's after-market session.
• Abraxas Petroleum, Inc. (NASDAQ:AXAS) stock surged 6.2% to $0.30. According to the most recent rating by Johnson Rice, on November 19, the current rating is at Accumulate.
• Pacific Drilling, Inc. (NYSE:PACD) stock increased by 4.7% to $1.80. The most recent rating by Fearnleys...
Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns..
Well not so secret now, the main point is you do not have to climb Mount Everest to be called a mountain climber, there are many other hills to climb to make your mark. Just like stocks.
You do not have to battle with the high frequency traders to win in the markets, there are long and slow methods to do just as well.
News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.
In most of Asia, the Chinese New Year is already in full swing. Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year. Millions of people have already traveled hundreds of thousands of miles to visit family...
It’s a good idea for investors to be aware of key indicators and inter-market relationships.
Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.
Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.
David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.
Phil has a chapter in a newly-released eBook that we think you’ll enjoy.
In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.
This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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coordinator for PSW. She manages the site
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Contact Ilene to learn about our affiliate and
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Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns.. 
Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.
The biggest known news date in the next 18 months is the US Election. The biggest unknown news date is when the US believes it is in a economic recession.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
